What’s to blame for the Seattle area’s out of control housing prices? If you read the local papers, you’ll hear all kinds of reasons. Booming local economy, running out of land, super-extra desirable climate, Microsoft/Boeing, you name it, they’ve claimed it (almost). The latest scapegoat: local zoning.
“Local zoning is the No. 1 enemy of work-force housing,” Ron Terwilliger, chairman and chief executive of Atlanta-based developer Trammell Crow Residential, said at a talk hosted by the Seattle chapter of the Urban Land Institute, a national land-use think tank.
Seattle created urban nodes that mix apartments and condos with stores, services and transit. But, with the exception of a recent decision to allow backyard apartments in southeast Seattle, elected officials are reluctant to increase the number of homes allowed in single-family zones, which take up 65 percent of the city’s land.
“It would seem to me like at least your single-family zoning ought to have some flexibility,” Terwilliger said in response to a question on the matter from Seattle Planning and Development Director Diane Sugimura. “It seems like an overallocation of single-family.”
Last year, the typical single person in Seattle earned enough to buy a home for just under $200,000; the typical family of four had enough to pay just over $280,000, the Department of Housing and Urban Development said. Median prices were about $450,000 for a house and $290,000 for a condo.
Someone earning 80 percent of the median income could afford the $1,010 monthly rent for an average one-bedroom Seattle apartment, but not the $1,324 average cost for a one-bedroom unit built from 2004 through 2006, according to figures from HUD and Dupre + Scott Apartment Advisors.
The cost of urban housing leads many workers to live farther from cities, adding to commutes that cost workers money and time, Terwilliger said. This also is becoming an economic-development issue, he said, as companies move to places where their employees can afford homes.
Allow me to clarify the “almost” in my text above. You may notice that of all the claims the local press makes about why prices are so high, they never bother to mention the two biggest factors: loose lending and “buy it now” mentality. I don’t doubt that zoning, land limitations, and the like have some effect that tends to push prices higher, but I think they’re a red herring when it comes to the price explosion we’ve seen in the last 5-8 years.
Which is more likely, that Seattle’s home prices skyrocketed due primarily due to local factors (zoning, local companies, etc.), coincidentally over an almost identical time line as similar gains across the country, or that national factors (lending, psychology, etc.) pushed Seattle home prices up along with everywhere else? I’m going to have to go with Occam’s razor on this one.
(Aubrey Cohen, Seattle P-I, 09.19.2007)